Chinese President Xi Jinping arrived in Lima on 14 November 2024, kicking off a week-long diplomatic venture in Latin America. His agenda includes the inauguration of the Chancay deep-water port, a significant infrastructure investment aimed at enhancing trade with Asia-Pacific countries.
Inauguration of the Chancay Port
The Chancay port, built by Cosco Shipping Ports, is set to revolutionise trade—serving as a critical hub connecting Peru with China and other South American nations. The port is expected to handle up to 1.5 million containers annually and generate around US$4.5 billion in annual revenues, according to experts.
Strategic Importance
- Chancay helps facilitate trade for Peru, Chile, Colombia, and Ecuador, effectively bypassing traditional routes through Mexico and the US.
- The port is seen as a strategic move by Beijing to strengthen its influence in South America amidst rising global trade tensions.
Trade Relations with Latin America
China is Peru’s fourth-largest trading partner, with bilateral trade reaching nearly US$36 billion in 2023. The inauguration was attended by Peru’s President Dina Boluarte, who underscored the importance of the port for economic dynamism.
Potential Implications
Experts have raised concerns regarding the port’s dual-use potential, potentially serving both commercial and military interests. General Laura Richardson, the former US Southern Command chief, voiced apprehensions about the Chinese military’s possible access to the port, fueling fears about a shift in regional power dynamics.
Building Connectivity
Mr Xi’s plans also involve establishing a new railway line to connect the Chancay port with Brazilian markets, particularly for soybean exports—critical to China’s food security. This infrastructure development aligns with China’s broader *Belt and Road Initiative*, aimed at expanding its global trade network.
Looking Ahead
As discussions continue among APEC leaders, the focus remains on how such infrastructure will influence international trade routes and regional relationships, especially with the anticipated economic policies under the Trump administration, which could reshape trade dynamics significantly.